Social Security gives you:
- Guaranteed lifetime income
- Benefits that are adjusted for inflation
- Survivor benefits
- Preferential tax treatment compared with ordinary income
Will Social Security cover all your retirement needs?
Probably not. Social Security may only be about 40% of your pre-retirement income.1
When can you file?
You can start getting Social Security as early as 62 (with a potential reduction in benefits by as much as 30%).2 When you hit full retirement age (FRA), you can get Social Security without a penalty. Your full retirement age varies based on the year and month you were born.
How is Social Security calculated?
It’s based on your lifetime Social Security earnings and adjusted for inflation. The basic formula is the total of your highest 35 years of adjusted earnings divided by 420 (the number of months in 35 years) equals your monthly average earnings. Your benefits are determined using this amount and the maximum benefit cap. The monthly amount you receive if you file at your FRA is called the Primary Insurance amount (PIA).
Eligible for 100% of benefits
| BIRTH YEAR | FULL RETIREMENT AGE |
|---|---|
| 1943-1954 | 66 |
| 1955 | 66 + 2 months |
| 1956 | 66 + 4 months |
| 1957 | 66 + 6 months |
| 1958 | 66 + 8 months |
| 1959 | 66 + 10 months |
| 1960-later | 67 |
